SCOTS could get welfare benefits at lower rates than people in wealthy parts of England under plans being worked on by Labour.

Shadow Chancellor Ed Balls yesterday raised the idea of a regional cap on welfare, opening the door to variations in a range of social security benefits.

In a major speech outlining where Labour might make savings, Balls said his party would cut £200 winter fuel payments to wealthy pensioners.

But he also revealed that he was considering regional variations on the Coalition Government’s controversial welfare cap.

Balls said the welfare cap of £25,000 a year per household should be higher in London but could be lower in parts of the UK where housing is cheaper.

Balls said Labour wanted a system that “takes account of housing costs in different parts of the country”.

He added that an independent body, like the Low Pay Commission, would advise on whether the cap should be higher in high-cost housing areas like London, but potentially lower in other parts of the country.

The SNP pounced on the comments and claimed that welfare payments in Scotland would only be safe from cuts through independence.

SNP welfare spokeswoman Eilidh Whiteford said: “This is an extraordinary step for Labour to take – and confirms that the only way to safeguard the welfare state in Scotland is by voting Yes next September.

“A majority of people in Scotland believe welfare and pensions policy should be decided by Holyrood, not Westminster. Developments like this show why having control in Scotland is essential.”

Balls also drew fire from the unions over his proposals on winter fuel, with the GMB saying it was a “no hope” message and an attack on universal benefits.

National secretary Brian Strutton said: “It is disturbing that Mr Balls was arguing for continuing this Government’s austerity plans.

“Everyone who wants to support Labour is crying out for a new hope and a new direction. Indeed this seemed to be the message coming from Ed Miliband but now Mr Balls has out Osborned Osborne.”